ARIZONA STATE SENATE
Phoenix, Arizona
children’s health insurance;
requirements; study
Purpose
Replaces the six-month waiting period for eligibility for the children’s health insurance program (CHIP) with the authority of the Director of Arizona Health Care Cost Containment System (AHCCCS) to prescribe rules for a waiting period.
Background
In 1998 the Legislature
established CHIP to provide health care coverage to children under age 19 from
families with income up to 200 percent of the federal poverty level ($34,100
for a family of four). As of January 1, 2001, 94,573 children have been
approved for health care coverage due to the outreach activities of the AHCCCS
administration and other organizations; 42,875 have been enrolled in CHIP and
51,698 have been approved for Medicaid.
Federal law requires each
state’s CHIP plan to include a description of the state’s procedure that
ensures coverage under CHIP does not substitute for health insurance coverage
under private group health plans. To
address this requirement, many states implemented “crowd out” policies or
eligibility waiting periods to discourage parents and employers from dropping
current coverage for the purpose of enrolling children into CHIP.
A.R.S. §36-2983 imposes a
six-month eligibility waiting period for children with previous coverage unless
that coverage was discontinued due to loss of employment or another involuntary
reason. S.B. 1074 eliminates this
waiting period and allows the Director of AHCCCS to adopt rules that impose a
waiting period for a child who was involuntarily dropped from health insurance.
Each month, an average of 117 children are denied eligibility for CHIP due to private health insurance coverage. According to AHCCCS, the cost of providing coverage to these children for one year is approximately $135,000. Of this amount, 25 percent or $33,750 represents the state’s matching funds. However, this figure does not include enrollment growth or a change in behavior for families who have private health insurance coverage.
1. Eliminates the required six-month waiting period for eligibility when a child’s health insurance coverage is voluntarily dropped.
2. Allows the director of AHCCCS to adopt rules that require a time period during which a person who is involuntarily dropped from insurance coverage must remain uninsured.
3. Makes a conforming change.
4. Provides for a general effective date.
Prepared by Senate Staff
January 19, 2001